Template:Nutshell EUA Annex (d)(i)(5): Difference between revisions

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'''{{euaprov|Settlement Disruption Event}}''':  
{{euaprov|(d)(i)(5)}} '''{{euaprov|Suspension Event}}'''
:Something beyond the affected party’s control that, having used [[all reasonable efforts]], it cannot overcome and which makes it impossible to perform its obligations to deliver or to accept {{euaprov|Allowances}} under an {{euaprov|EU Emissions Allowance Transaction}}.
:(A) '''Notification''': A party impacted by a  {{euaprov|Suspension Event}} must notify the other party in writing as soon as reasonably practicable. It must also give what details of the {{euaprov|Suspension Event}} it has and a non-binding estimate of the extent and expected duration of its resultant inability to perform.
 
:(B) '''Effect''': Upon a {{euaprov|Suspension Event}} both parties’ obligations will be suspended, subject to {{euaprov|Continuing Suspension Event}} below, until the {{euaprov|Suspension Event}} no longer prevents settlement. During the {{euaprov|Suspension Event}}, the affected party must try [[Endeavour|reasonably]] to overcome it.  
:Note that the following will not count as Settlement Disruption Events if they cause an inability to deliver {{euaprov|Allowances}} in the affected party’s {{euaprov|Specified Holding Account}}, as a result of:
:(C) '''Delayed Performance''': Subject to {{euaprov|Continuing Suspension Event}} below, once the {{euaprov|Suspension Event}} ceases, both parties must promptly resume their obligations under the {{isdaprov|Transaction}}s by the earlier of: (i) ten {{euaprov|Delivery Business Day}}s after the Suspension Event lifts; and (ii) 3 {{euaprov|Delivery Business Days}} before the {{euaprov|End of Phase Reconciliation Deadline}} (the “'''{{euaprov|Delayed Delivery Date}}'''”). If {{euaprov|Delivering Party}} has successfully delivered the {{euaprov|Allowances to be Delivered}} by the {{euaprov|Delayed Delivery Date}}, {{euaprov|Receiving Party}} must pay {{euaprov|Delivering Party}}, on the {{euaprov|Delayed Payment Date}}:
::(a) the low or non-allocation of {{euaprov|Allowances}} by any state;
::(I) '''{{euaprov|Allowance Forward Transaction}}s''': ''({{euaprov|Allowance Purchase Price}} x {{euaprov|Number of Allowances}} delivered by the {{euaprov|Delayed Delivery Date}}) + {{euaprov|Cost of Carry Amount}}'';
::(b) a Member State or {{euaprov|Central Administrator}} not replacing {{euaprov|Third Compliance Period}} {{euaprov|Allowances}} with {{euaprov|Fourth Compliance Period}} {{euaprov|Allowances}}; or
::(II) '''{{euaprov|Allowance Option Transaction}}s''': ''({{euaprov|Allowance Strike Price}} x {{euaprov|Number of Allowances}} delivered by the {{euaprov|Delayed Delivery Date}}) + {{euaprov|Cost of Carry Amount}}''.
::(c) any party’s failure of a party to procure sufficient {{euaprov|Allowances}} to meet its delivery obligations
:(D) '''{{euaprov|Continuing Suspension Event}}''': Where a {{euaprov|Suspension Event}} continues on the {{euaprov|Long-Stop Date}}, then there will be an {{isdaprov|Illegality}} where the {{isdaprov|Transaction}} is the sole {{isdaprov|Affected Transaction}}, both parties are {{isdaprov|Affected Parties}},no {{isdaprov|Waiting Period}} will apply and the {{euaprov|Long-Stop Date}} will be the {{isdaprov|Early Termination Date}}. When determining the {{isdaprov|Early Termination Amount}}, if “{{euaprov|Payment on Termination for Suspension}}” applies, the suspended obligations will resume on the {{isdaprov|Early Termination Date}}, and if it does not, the parties will have no further obligations after the {{euaprov|Suspension Event}} (other than for any {{isdaprov|Unpaid Amounts}}); provided that:
 
::(i) {{euaprov|Delivering Party}} must promptly refund any amount {{euaprov|Receiving Party}} paid it under any {{euaprov|Allowance Forward Transaction}} or {{euaprov|Call}}; and  
:Something which otherwise would be a Settlement Disruption Event ''and'' a {{euaprov|Suspension Event}}, will count as a {{euaprov|Suspension Event}} and ''not'' a Settlement Disruption Event.
::(ii) {{euaprov|Receiving Party}} must promptly refund any amount {{euaprov|Delivering Party}} paid it under a {{euaprov|Put}}
:that was not paid for delivered {{euaprov|Allowance}}s, together with interest from the payment date until the  {{isdaprov|Transaction}} termination date at the relevant overnight deposit rate.

Latest revision as of 14:06, 4 May 2023

(d)(i)(5) Suspension Event

(A) Notification: A party impacted by a Suspension Event must notify the other party in writing as soon as reasonably practicable. It must also give what details of the Suspension Event it has and a non-binding estimate of the extent and expected duration of its resultant inability to perform.
(B) Effect: Upon a Suspension Event both parties’ obligations will be suspended, subject to Continuing Suspension Event below, until the Suspension Event no longer prevents settlement. During the Suspension Event, the affected party must try reasonably to overcome it.
(C) Delayed Performance: Subject to Continuing Suspension Event below, once the Suspension Event ceases, both parties must promptly resume their obligations under the Transactions by the earlier of: (i) ten Delivery Business Days after the Suspension Event lifts; and (ii) 3 Delivery Business Days before the End of Phase Reconciliation Deadline (the “Delayed Delivery Date”). If Delivering Party has successfully delivered the Allowances to be Delivered by the Delayed Delivery Date, Receiving Party must pay Delivering Party, on the Delayed Payment Date:
(I) Allowance Forward Transactions: (Allowance Purchase Price x Number of Allowances delivered by the Delayed Delivery Date) + Cost of Carry Amount;
(II) Allowance Option Transactions: (Allowance Strike Price x Number of Allowances delivered by the Delayed Delivery Date) + Cost of Carry Amount.
(D) Continuing Suspension Event: Where a Suspension Event continues on the Long-Stop Date, then there will be an Illegality where the Transaction is the sole Affected Transaction, both parties are Affected Parties,no Waiting Period will apply and the Long-Stop Date will be the Early Termination Date. When determining the Early Termination Amount, if “Payment on Termination for Suspension” applies, the suspended obligations will resume on the Early Termination Date, and if it does not, the parties will have no further obligations after the Suspension Event (other than for any Unpaid Amounts); provided that:
(i) Delivering Party must promptly refund any amount Receiving Party paid it under any Allowance Forward Transaction or Call; and
(ii) Receiving Party must promptly refund any amount Delivering Party paid it under a Put
that was not paid for delivered Allowances, together with interest from the payment date until the Transaction termination date at the relevant overnight deposit rate.
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